Later this month, the six broadcast television networks will start the launch of the new TV season, offering among 123 programs about three dozen new comedies and dramas they hope will whet the fickle entertainment appetites of the American viewing public.
If history is any guide, the vast majority of these new programs will be heading straight into television’s jaws of death.
Thirty-four new shows debuted last fall. Only four are returning for this season.
The odds of survival may be no better in the new season. The people who make a living by paying attention to network television see more program fatalities, smaller audiences and mostly low or no network profits.
This could be dismissed as another off-camera rerun in the always risky business of broadcast network television, except that the effects of the networks’ tightening financial squeeze are starting to show up more and more on viewers’ TV screens.
In the new season, ABC, CBS and NBC will broadcast 11 newsmagazines in prime time, covering six of the seven nights of the week. NBC will expand “Dateline” to five nights. CBS will offer a second night of “60 Minutes.” And Sunday night will offer a choice of three newsmagazines.
This is part of the network television future–one composed of glossy, big-time sporting events, a modest collection of heavily promoted and well-written comedies and dramas and a spreading stable of newsmagazines and mediocre, low-budget programs.
For the networks, this is not an issue of taste but of responding to skyrocketing costs, dwindling audiences and a dearth of talent.
It is little wonder that newsmagazines are financially appealing. They cost about $600,000 to produce per episode, while sitcoms cost $900,000 and dramas about $1.5 million, on average.
Randy Falco, the incoming president of the top-rated NBC Television Network, said viewers should expect more newsmagazines in the future and more reality-type programs, such as “America’s Dumbest Criminals” and “Cops.”
“If you look at the number of half-hour sitcoms that we tried to put on last year, it became evident that it was difficult to support all of those half hours with the existing pool of talent–on-air talent, writers and producers,” Falco said. “It’s a difficult issue.”
The financial pressure has been building throughout the 1990s as the broadcast networks lost much of their once commanding franchise to cable channels. The financial pressure at the broadcast networks now is sending shudders all the way down to the networks’ affiliates and the dozens of stations they own and operate.
Through a variety of recently negotiated financial arrangements, network stations are being required to pay the networks millions of dollars to help defray the enormous costs of pro sports broadcast rights. That, in turn, eventually will affect the most visible product of hundreds of television stations, the local news.
“I sense a turning point coming here,” said Jayne Spittler, senior vice president and worldwide media research director for Leo Burnett Co.’s Starcom Media Services.
“For so long, the television industry has tried to do what it’s always done with only minor modifications. . . . Their financial equation has changed,” Spittler said.
The cost pressures are particularly acute now. Consider:
– The new National Football League broadcast rights contract will total roughly $18 billion over the next eight years. That compares with about $4 billion for the four-year contract that expired early this year.
– NBC and Time Warner Inc. agreed to pay $2.64 billion to renew their rights to broadcast National Basketball Association games for four years. That’s twice the amount of the old contract.
– Walt Disney Co. reportedly has bid $600 million to broadcast National Hockey League games on ABC and ESPN over five years; that’s nearly triple the size of the current contract, despite dismal ratings for pro hockey.
– NBC will pay $13 million for each new episode of “ER,” up from $3 million last season.
“There’s too much demand and too little talent,” said media analyst Dennis McAlpine at Josephthal & Co. in New York. “If somebody makes it in television, like George Clooney or Helen Hunt, they become movie stars. And for the networks to keep them, they have to pay them more.”
All of this multiplying cost pressure is occurring as the Big Three networks–ABC, CBS and NBC– have lost almost half of their audience market share in the past two decades. Ninety-one percent of American households were tuned into the networks during prime time 20 years ago; in the just-completed season, the figure dropped to 47 percent, according to Nielsen Media Research.
More erosion is expected.
Among the six broadcast networks–including Fox, UPN and WB–only NBC is expected to turn a profit in the new season, analysts say. And it is expected to be much smaller than NBC’s most recent profit figure, $500 million.
“I think this season is more important than the last, for a number of reasons,” McAlpine said. “Costs are going up and we’ll see some vindication or vilification of CBS for what it did with football and for what NBC did with `ER.’ There will be a lot of answers to those questions. Did those guys make the right moves?”
CBS, for instance, will pay $4 billion over the next eight years to broadcast NFL games. NBC decided not to pay the inflated price to keep its rights.
“It was not economically viable for this network,” Falco said. In an extremely risky venture, however, NBC and Turner Sports are trying to launch a competing pro football league.
As executives will quickly note, the networks have been given up for dead before and have found a way to survive. They remain the most efficient way for advertisers to reach a large audience. ABC, CBS, NBC and Fox obtained about $6.1 billion in advertising commitments in advance of the new TV season, roughly the same amount they received in the previous season. When UPN and WB are added, the total reaches $6.5 billion, up from $6.3 billion.
Just as the networks are losing market share, some popular cable channels, including CNN and ESPN, also have suffered a drop in ratings. The same uncontrolled proliferation of cable channels that hurt broadcasting is also hurting cable.
“What makes good copy in the press is that broadcast television as a genre is losing viewers to cable television, which is true. But the highest-rated programs on television today are still on broadcast television,” said Paul Sweeney, a broadcast industry analyst at Salomon Smith Barney in New York.
That is only short-term comfort, given the long-term prognosis of shrinking audiences, higher costs and advertisers worried about whether they are getting their dollar’s worth from the network.
“The big concern is audience erosion over the long haul,” said Marge Navolio, president and chief executive of CPM Inc., a Chicago media buyer. Eventually, audience shrinkage will lead to a reduction of ad spending on the networks and that, Navolio said, will hurt the quality of programming.
Josephthal’s McAlpine sees the day when some network programming will be abandoned in certain hours because it won’t be worth the cost of trying to compete for the viewers’ attention.
“At some point they lose the ability to put seven nights of cheap programming on,” McAlpine said. Much of the quality entertainment programming will shift to cable, McAlpine predicted.
Network executives dispute that dire prediction but acknowledge the need to be much more cost-conscious about what they air.
“Unfortunately, the newsmagazines . . . continue to do better than dramatic series by and large. Is that a scary trend? Perhaps,” Leslie Moonves, president and chief executive officer of CBS Television, told TV critics last month.
“Once again, in this day and age, it is survival of the fittest, and we need to do a better job . . . in our programming to keep our audiences there,” Moonves said.
Said NBC’s Falco: “More and more, we try to get financial interests in the shows we put on the schedule. You can’t stand still and be complacent about the cost of operating the business.”
Now that the networks are able to own a financial stake in the programs they air, the likelihood will increase that those financial interests–syndication and cable rights and overseas sales–will be a major factor when they decide what to put on the schedule.
“If it comes down to choosing two shows, they’ll keep the one they have the financial interest in, even if they were offered something that was as good or better,” said former network executive Jerry Solomon, who is president of national broadcast sales at SFM Media, a New York-based media buyer.
Network executives are talking about cost controls and, in the case of NBC, possibly merging with a studio operator. But competition for viewers is fierce and, just as baseball owners have driven up the price of free agent salaries, sports rights and talent searches have made the network business much more expensive and difficult.
“Every time somebody says you can’t have more than five networks, six seem to exist,” Starcom’s Spittler said. “It seems like any network is willing to spend for some showcase piece that raises the scale for everything else.”
How true. Yet another new broadcast network, the family-oriented PaxNet, is scheduled to launch Aug. 31.
